Services Marketing
Chapter 10:
Crafting the Service
Environment
Slide © 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 10 – Page 1
Overview of Chapter 10
Services Marketing
 What is the Purpose of Service Environments?
 Understanding Consumer Responses to Service
Environments
 Dimensions of the Service Environment
 Putting It All Together
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Services Marketing 7/e
Chapter 10 – Page 2
Services Marketing
What is the Purpose of
Service Environments?
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Chapter 10 – Page 3
Purpose of Service Environments
Services Marketing
 Shape customers’ experience and their behaviors
 Support image, positioning, and differentiation
 Part of the value proposition
 Facilitate service encounter and enhance productivity
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Chapter 10 – Page 4
Shape customers’ experience and
their behaviors
Services Marketing
 Message-creating medium
 symbolic cues to communicate the distinctive nature and quality of
the service experience
 Attention-creating medium
 make servicescape stand out from competition and attract
customers from target segments
 Effect-creating medium
 use colors, textures, sounds, scents, and spatial design to
enhance desired service experience
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Chapter 10 – Page 5
Support Image, Position, and
Differentiation
Orbit Hotel and Hostel, Los Angeles
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Services Marketing
Four Seasons Hotel, New York
Chapter 10 – Page 6
Servicescape as Part of Value
Proposition
Services Marketing
 Physical surroundings help shape appropriate feelings and
reactions in customers and employees
 e.g., Disneyland, Denmark’s Legoland
 Servicescapes form a core part of the value proposition
 Las Vegas: repositioned itself to a somewhat more wholesome fun
resort, visually striking entertainment center
 Florida-based Muvico: builds extravagant movie theatres and
offers plush amenities. “What sets you apart is how you package it.”
(Muvico’s CEO, Hamid Hashemi)
The power of servicescapes is being discovered
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Chapter 10 – Page 7
Services Marketing
Understanding Consumer
Reponses to
Service Environments
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Chapter 10 – Page 8
The Mehrabian-Russell
Stimulus-Response Model
Services Marketing
Feelings Are a Key Driver of Customer Responses to
Service Environments
Environmental Stimuli
and Cognitive
Processes
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Dimensions of
Affect:
Pleasure and
Arousal
Services Marketing 7/e
Response/Behaviors:
Approach Avoidance
& Cognitive
Processes
Chapter 10 – Page 9
Insights from Mehrabian-Russell
Stimulus-Response Model
Services Marketing
It is a simple yet fundamental model of how people respond to
environments that illustrates:
 The environment, its conscious and unconscious perceptions, and
interpretation influence how people feel in that environment
 Feelings, rather than perceptions/thoughts drive behavior
 Typical outcome variable is ‘approach’ or ‘avoidance’ of an
environment, but other possible outcomes can be added to model
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Services Marketing 7/e
Chapter 10 – Page 10
The Russell Model of Affect
Services Marketing
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Chapter 10 – Page 11
Insights from Russell’s
Model of Affect
Services Marketing
 Emotional responses to environments can be described
along two main dimensions:
 Pleasure: subjective, depending on how much individual likes or
dislikes environment
 Arousal: how stimulated individual feels, depends largely on
information rate or load of an environment
 Separates cognitive emotions from emotional dimensions
 Advantage: simple, direct approach to customers’ feelings
 Firms can set targets for affective states
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Chapter 10 – Page 12
Drivers of Affect
Services Marketing
 Caused by perceptions and cognitive processes of any
degree of complexity
 Determines how people feel in a service setting
 If higher levels of cognitive processes are triggered, the
interpretation of this process determines people’s feelings
 The more complex a cognitive process becomes, the more
powerful its potential impact on affect
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Chapter 10 – Page 13
Behavioral Consequence of Affect
Services Marketing
 Pleasant environments result in approach, whereas
unpleasant ones result in avoidance
 Arousal amplifies the basic effect of pleasure on behavior
 If environment is pleasant, increasing arousal can generate
excitement, leading to a stronger positive consumer response
 If environment is unpleasant, increasing arousal level will move
customers into the “distressed” region
 Feelings during service encounters are an important driver
of customer loyalty
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Chapter 10 – Page 14
An Integrative Framework:
The Servicescape Model
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Services Marketing
Chapter 10 – Page 15
An Integrative Framework:
The Servicescape Model
Services Marketing
 Identifies the main dimensions in a service environment and
views them holistically
 Internal customer and employee responses can be
categorized into cognitive, emotional, and psychological
responses, which lead to overt behavioral responses
towards the environment
 Key to effective design is how well each individual
dimension fits together with everything else
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Chapter 10 – Page 16
Services Marketing
Dimensions of the
Service Environment
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Chapter 10 – Page 17
Main Dimensions in
Servicescape Model
Services Marketing
 Ambient Conditions
 Characteristics of environment pertaining to our five senses
 Spatial Layout and Functionality
 Spatial layout:
- floorplan
- size and shape of furnishings
 Functionality: ability of those items to facilitate performance
 Signs, Symbols, and Artifacts
 Explicit or implicit signals to:
- help consumers find their way
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Chapter 10 – Page 18
Ambient Conditions
Services Marketing
 Ambient conditions are perceived both separately and
holistically, and include:
 Lighting and color schemes
 Size and shape perceptions
 Sounds such as noise and music
 Temperature
 Scents
 Clever design of these conditions can elicit desired
behavioral responses among consumers
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Chapter 10 – Page 19
Music
Services Marketing
 In service settings, music can have powerful effect on
perceptions and behaviors, even if played at barely audible
levels
 Structural characteristics of music―such as tempo,
volume, and harmony―are perceived holistically
 Fast tempo music and high volume music increase arousal levels
 People tend to adjust their pace, either voluntarily or involuntarily,
to match tempo of music
 Careful selection of music can deter wrong type of
customers
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Chapter 10 – Page 20
Scent
Services Marketing
 An ambient smell is one that pervades an environment
 May or may not be consciously perceived by customers
 Not related to any particular product
 Scents have distinct characteristics and can be used to
solicit emotional, physiological, and behavioral responses
 In service settings, research has shown that scents can
have significant effect on customer perceptions, attitudes,
and behaviors
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Chapter 10 – Page 21
Aromatherapy: Effects of Selected
Fragrances on People
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Services Marketing
Chapter 10 – Page 22
Color
Services Marketing
 Colors can be defined into three dimensions:
 Hue is the pigment of the color
 Value is the degree of lightness or darkness of the color
 Chroma refers to hue-intensity, saturation, or brilliance
 People are generally drawn to warm color environments
 Warm colors encourage fast decision making and are good for
low-involvement decisions or impulse buys
 Cool colors are preferred for high-involvement decisions
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Chapter 10 – Page 23
Common Associations and
Human Responses to Colors
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Services Marketing
Chapter 10 – Page 24
Signs, Symbols, and Artifacts
Services Marketing
 Communicates the firm’s image and helps customers find their
way

First time customers will automatically try to draw meaning from the
signs, symbols, and artifacts
 Challenge is to guide customer through the delivery process

Unclear signals from a servicescape can result in anxiety and uncertainty
about how to proceed and obtain the desired service
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Chapter 10 – Page 25
Services Marketing
Putting It All Together
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Chapter 10 – Page 26
Selection of Environmental
Design Elements
Services Marketing
 Consumers perceive service environments holistically
 No dimension of design can be optimized in isolation, because
everything depends on everything else
 Holistic characteristic of environments makes designing service
environment an art
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Chapter 10 – Page 27
Tools to Guide Servicescape Design
Services Marketing
 Keen observation of customers’ behavior and responses
 Feedback and ideas from frontline staff and customers
 Photo audit – Mystery Shopper to take photographs of service
experience
 Field experiments can be used to manipulate specific dimensions
in an environment and the effects observed
 Blueprinting or service mapping – extended to include physical
evidence in the environment
Slide © 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 10 – Page 28
Summary
Services Marketing
 Service environment:
 Shapes customers’ experiences and behavior
 Facilitates service encounters and enhances productivity
 Mehrabian-Russell stimulus-response model and Russell’s model
of affect help us understand customer responses to service
environments
 Main dimensions of servicescape model:
 Ambient conditions – music, scent, color, etc.
 Spatial layout and functionality
 Signs, symbols, and artifacts
Slide © 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 10 – Page 29
Summary
Services Marketing
 When putting it all together, firms should
 Design with a holistic view
 Design from a customer’s perspective
 Use tools to guide servicescape design
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Chapter 10 – Page 30